Account trading is normal in this channel. It is also where independent produce and stockfeed businesses quietly get into trouble.
Terms are 30 days. Reality is longer. Seasons are hard, relationships are long, and nobody wants to be the person who chases a fourth-generation customer over an invoice. So the balance drifts, and the business funds it.
The problem is rarely goodwill. It is visibility. If statements go out late, and nobody can see at a glance who has moved from 30 days to 60, the drift stays invisible until it is large.
Our Tower Systems produce / farm supply / stockfeed software manages customer accounts properly. Charges go on the account at the counter. Statements are produced and sent on time. Ageing is visible, so the balance can be read by period rather than as one number. A customer trending the wrong way is easy to spot while the amount is still small.
Some practical points for any produce or stockfeed business reviewing this.
Statements sent on time change behaviour on their own. Many businesses find that consistency alone shortens average collection time, before anyone makes a phone call.
Credit limits are worth setting even where there is no intention of enforcing them hard. A prompt at the counter is easier than a conversation later.
Account trading data is customer data. Who buys what, how often, and in what season. That is useful for far more than collections.
The accounts side also needs to reach the bookkeeping without being keyed twice. The software integrates with Xero, MYOB and QuickBooks, so account activity flows through rather than being re-entered.
Cash flow in this channel is seasonal and always will be. The goal is not to become hard. It is to know exactly where the business stands, early enough to act.
If accounts are running longer than terms, send Tower Systems a note on how statements and follow-up are handled today. The answer on whether the software is a good fit will be honest. If it is not a fit, that will be said plainly.
…
Contact us: sales@towersystems.com.au or 1300 662 957 or research us: www.towersystems.com.au. Locally made. Locally supported.
Recent Comments